ORIGIN

An image meme that spread via social media in March 2016 held that Corrections Corporation of America (CCA), a company that owns and manages private prisons and detention centers, spends $1 million a year in lobbying efforts to oppose the legalization of marijuana because fewer people being sent to jail on drug charges would negatively affect their bottom line:

DID YOU KNOW? (#ENDtheDRUGWAR)

Corrections Corporation of America, the largest for-profit prison company in America, spends nearly $1 million a year against cannabis legalization. This is their official reason why: “changes with respect to drugs and controlled substances … could affect the number of persons arrested, convicted, and sentenced, thereby potentially reducing demand for the correctional facilities to house them.

The clear message was that laws prohibiting the possession and use of marijuana (and other drugs) are less about curbing the dangers such drug use might pose to the public than they are about a privatized incarceration system that has a strong incentive to ensure prison populations remain high enough to maintain profit levels.

Missing from the widely circulated graphic were any sources, citations, date, or context for the purported statement from the CCA about changes to drug laws. The image meme’s overall viewpoint, however, was elucidated in an April 2015 Washington Postitem critical of privatized prisons in general and CCA in particular:

Several industries have become notorious for the millions they spend on influencing legislation and getting friendly candidates into office … one has managed to quickly build influence with comparatively little scrutiny: Private prisons. The two largest for-profit prison companies in the United States — GEO and Corrections Corporation of America — and their associates have funneled more than $10 million to candidates since 1989 and have spent nearly $25 million on lobbying efforts. Meanwhile, these private companies have seen their revenue and market share soar. They now rake in a combined $3.3 billion in annual revenue and the private federal prison population more than doubled between 2000 and 2010, according to a report by the Justice Policy Institute. Private companies house nearly half of the nation’s immigrant detainees, compared to about 25 percent a decade ago, a Huffington Post report found. In total, there are now about 130 private prisons in the country with about 157,000 beds.

A portion of that item included the source which was presumably the one paraphrased in the meme, attributed to a 2014 CCA annual report:

The demand for our facilities and services could be adversely affected by the relaxation of enforcement efforts, leniency in conviction or parole standards and sentencing practices or through the decriminalization of certain activities that are currently proscribed by our criminal laws. For instance, any changes with respect to drugs and controlled substances or illegal immigration could affect the number of persons arrested, convicted, and sentenced, thereby potentially reducing demand for correctional facilities to house them … Legislation has been proposed in numerous jurisdictions that could lower minimum sentences for some non-violent crimes and make more inmates eligible for early release based on good behavior.

A January 2013 American Civil Liberties Union (ACLU) piece provided both the quote and a link to its source CCA’s Securities and Exchange Commission (SEC) Form 10-K filings, dated 25 February 2011. However, it’s important to note the purpose of those mandatory 10-K filings, which include a “comprehensive overview of the company’s business and financial condition.” As SEC Chair Mary Jo White noted in 2013, a key aspect of those reports is disclosure of risk to shareholders and potential investors:

Without proper disclosure, investors would be unable to make informed decisions. They would not know about the financial condition of the company they are investing in. Nor would they know about how the company operates, who its board members are or what business, operational or financial risks the company faces, let alone may face in the future.

The core purpose of disclosure, of course, is to provide investors with the information they need to make informed investment and voting decisions. Such information makes it possible for investors to evaluate companies and have the confidence to invest and, as a result, allow our capital markets to flourish.

In CCA’s February 2011 Form 10-K filing, therefore, the company was not strategizing about how to prevent changes to existing laws that might adversely affect their profits, but rather listing a number of potential risks to profitability outside the company’s control that shareholders and investors should be aware of:

Our ability to secure new contracts to develop and manage correctional and detention facilities depends on many factors outside our control. Our growth is generally dependent upon our ability to obtain new contracts to develop and manage new correctional and detention facilities. This possible growth depends on a number of factors we cannot control, including crime rates and sentencing patterns in various jurisdictions and acceptance of privatization. The demand for our facilities and services could be adversely affected by the relaxation of enforcement efforts, leniency in conviction or parole standards and sentencing practices or through the decriminalization of certain activities that are currently proscribed by our criminal laws. For instance, any changes with respect to drugs and controlled substances or illegal immigration could affect the number of persons arrested, convicted, and sentenced, thereby potentially reducing demand for correctional facilities to house them. Legislation has been proposed in numerous jurisdictions that could lower minimum sentences for some non-violent crimes and make more inmates eligible for early release based on good behavior. Also, sentencing alternatives under consideration could put some offenders on probation with electronic monitoring who would otherwise be incarcerated. Similarly, reductions in crime rates or resources dedicated to prevent and enforce crime could lead to reductions in arrests, convictions and sentences requiring incarceration at correctional facilities.

More recent SEC filings from CCA, such as a document for the year ending 31 December 2015, reflect similar stated risks to investors. That filing also included a statement from CCA that, as a matter of policy, the company does not “lobby for or against policies or legislation that would determine the basis for, or duration of, an individual’s incarceration or detention”:

This possible growth depends on a number of factors we cannot control, including crime rates and sentencing patterns in various jurisdictions, governmental budgetary constraints, and governmental and public acceptance of privatization. The demand for our facilities and services could be adversely affected by the relaxation of enforcement efforts, leniency in conviction or parole standards and sentencing practices or through the decriminalization of certain activities that are currently proscribed by criminal laws. For instance, any changes with respect to drugs and controlled substances or illegal immigration could affect the number of persons arrested, convicted, and sentenced, thereby potentially reducing demand for correctional facilities to house them. Immigration reform laws are currently a focus for legislators and politicians at the federal, state, and local level. Legislation has also been proposed in numerous jurisdictions that could lower minimum sentences for some non-violent crimes and make more inmates eligible for early release based on good behavior. Also, sentencing alternatives under consideration could put some offenders on probation with electronic monitoring who would otherwise be incarcerated. Similarly, reductions in crime rates or resources dedicated to prevent and enforce crime could lead to reductions in arrests, convictions and sentences requiring incarceration at correctional facilities. Our company does not, under longstanding policy, lobby for or against policies or legislation that would determine the basis for, or duration of, an individual’s incarceration or detention.

Nonetheless, the image meme also alleges that the company spends approximately a million dollars per year fighting cannabis legalization. The Center for Responsive Politics‘ Open Secrets site (a watchdog organization that tracks lobbying efforts) maintains a profile for CCA that places its total expenditures on all lobbying efforts in 2015 at exactly $1,000,000 (and $1,020,000 in2014).

However, the opacity surrounding lobbying makes it difficult to determine precisely how much (if anything) CCA might spend for the purpose of influencing marijuana laws. According to the ACLU 2013 piece referenced above, the company’s lobbying efforts were spread across numerous political interests:

Although CCA insists that it does not engage in “lobbying or advocacy efforts that would influence enforcement efforts, parole standards, criminal laws, and sentencing policies,” the company spends heavily on both campaign contributions and lobbying. In 2011, CCA gave $710,300 in political contributions to candidates for federal or state office, political parties, and 527 groups (PACs and super-PACs). That same year, CCA spent $1.07 million lobbying federal officials and an undisclosed amount lobbying state officials. Additionally, as NPR reported two years ago, CCA was for many years involved in the American Legislative Exchange Council (ALEC), an organization of state legislators and corporations that drafted the basis for Arizona’s anti-immigrant SB1070 and that has consistently advocated for harsh sentencing and detention laws.

The breakdown of the $1,020,000 spent on lobbying by CCA in 2014 as presented on Open Secrets wasn’t broken down in detail. CCA’s top lobbying expenditures were listed as “Homeland Security” and “Government Issues,” with “Law Enforcement & Crime” at number three. Apparently the meme cited the total amount of money CCA spends on lobbying and inaccurately framed all of those expenditures as targeting “cannabis legalization.” H.R.4903 (a bill appropriating funds for immigration security in 2013-2014) was listed on Open Secrets as a top interest for which CCA lobbied, which dovetails with CCA disclosures mentioning the jailing of undocumented immigrants.

Open Secrets simply listed CCA among agencies possessing an interest in the continued criminalization of marijuana, without providing any details about monies those agencies might expend along those lines:

Private prisons are in the business of filling beds, and they make millions by incarcerating nonviolent drug offenders along with violent offenders and white-collar criminals. One private prison company, the GEO Group, Inc., is particularly successful at this: In its 2014 annual report, GEO noted that it had, on average, a facility occupancy rate of 95.7 percent. One of the largest for-profit prison companies, Corrections Corporation of America, stated in a 2010 regulatory filing that laxer drug laws could shrink its bottom line: “[A]ny changes with respect to drugs and controlled substances or illegal immigration could affect the number of persons arrested, convicted and sentenced, thereby potentially reducing demand for correctional facilities to house them.” Since 2008, the Corrections Corporation of America has spent at least $970,000 a year on lobbying. However, in its federal lobbying reports, the corporation includes a disclaimer that it does not lobby for or against policies that would determine whether an individual is incarcerated.

ProPublica found much the same in an investigation pertaining partly to CCA: while that entity reported CCA spent $17.4 million in a ten-year period on general lobbying, they included no marijuana-specific findings.

In short, the quotation about marijuana laws attributed by the original meme to CCA is accurate, but its source and context was an SEC-required disclosure of risks to shareholders, not a company memo advocating opposition to the legalization of marijuana.